Goods and Service Tax

 

GOODS AND SERVICE TAX

 

During the year  2000 a honourable person of our country started a initiative of combining all the taxes together to avoid the conflict of paying various taxes together for a product . This initiative was later implemented by another person after long 17years of discussion . The route lead  by Atal Bihari Vajpayee  was later followed by Narendra Modi which lead to the implementation of “GST” during the year 2017 on 1^st of July. The idea of GST was been followed various government officials during these years.

Mr.P.Chidambaram was the financial minister during the initial stage of the discussion of GST being pitched at the parliament . Later Pranab Mukherjee the new finance minister of India, announced the basic skeleton of the GST systemand then in December 2014 again the new finance minister of India Arun Jaitley  submitted the “GST” bill in the parliament and he also mentioned about the implementation of GST from 1^st April  2016 during the budget speech of 2015 .During May 2015 the Lok Sabha approved the Constitution Amendment Billof GST  . Later in August 2015 the bill was not passed by Rajya Shabha as the bill was opposed the opposition leaders .Later in march 2016 Jaitley says that he is in agreement with the opposition’s demand for the GST rate not to be set above 18%. But he is not inclined to fix the rate at 18%. In the future if the Government is in an unforeseen emergency and if  required to raise the tax rate it would possible only after  taking  the permission from the parliament. So, a fixed rate of tax is ruled out. On June 2016 the Finance ministry drafts a model law on GST to public expecting their views and suggestions . In August 2016 the opposition approves the Amendment Bill of GST and the bill was passed in Rajya Shabha . In September 2016 The Honourable President of India gives his consent for the Constitution Amendment Bill to become an Act.On 2017  Four Bills related to GST become Act, following approval in the parliament and the President's assent

§  Central GST Bill

§  Integrated GST Bill

§  Union Territory GST Bill

§  GST (Compensation to States) Bill

The GST Council also finalised on the GST rates and GST rules. The Government declares that the GST Bill will be applicable from 1 July 2017, following a short delay that is attributed to legal issues.

 

GST tax structure in India :-

* 0% Tax Rate:Essential goods such as milk, eggs, curd, and educational services fall under this category, ensuring affordability and accessibility for consumers.

* 5% Tax Rate: Items like coal, edible oils, tea, domestic LPG, and life-saving drugs are taxed at 5%, promoting accessibility to basic necessities.

* 12% Tax Rate: Goods such as butter, ghee, computers, fruit juice, and packed coconut water fall under this slab, striking a balance between affordability and revenue generation.

* 18% Tax Rate: Products like hair oil, capital goods, toothpaste, industrial intermediaries, and toiletries fall in this category, aiming to maintain tax revenue while ensuringreasonable consumer prices.

* 28% Tax Rate: High-end items like luxury cars, motorcycles, consumer durables (e.g., ACs, fridges), and sin goods like cigarettes and aerated drinks attract the highest GST rate, with additional cess applied on some items.

 

In recent updates to the GST rates in India, several adjustments have been made to benefit specific categories of goods. For instance, vehicles equipped with retrofitting kits for disabled individuals have a GST rate of 5%. Similarly, cancer treatment drugs like Keytruda have also received a reduced GST rate, dropping from 12% to 5%, ensuring that critical healthcare items remain more affordable for patients in need. The new “GST” system is expected to bring down the average costs of goods and services across the country by eliminating double taxation .The implementation of GST has boosted the growth of the manufacturing  and logistics ,however there have been challenges, including increased compliance burdens for small and medium-sized businesses and temporary inflationary pressures. Despite these challenges, the overall impact of GST has been positive, and the Indian economy is expected to continue growing.

 

R.S. Akash Varma (22UCM003)

III B.Com